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Congruence between technology and compensation systems: implications for strategy implementation

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  • Jason D. Shaw
  • Nina Gupta
  • John E. Delery

Abstract

This paper examines the interactive relationship between the use of integrated manufacturing and compensation practices in predicting several aspects of plant performance in the concrete pipe industry. We predicted that compensation practices reinforcing collective effort, teamwork, and flexibility (team incentives and skill‐based pay) enhance the effectiveness of integrated manufacturing systems (total quality management and advanced manufacturing technology), while practices inhibiting cooperation and teamwork among employees (individual incentives and seniority‐based pay) impede it. Results provide moderate support for the congruence model across several measures of plant effectiveness (labor hours per ton, lost‐time accidents, perceptual performance, and customer satisfaction). Implications of the research are addressed. Copyright © 2001 John Wiley & Sons, Ltd.

Suggested Citation

  • Jason D. Shaw & Nina Gupta & John E. Delery, 2001. "Congruence between technology and compensation systems: implications for strategy implementation," Strategic Management Journal, Wiley Blackwell, vol. 22(4), pages 379-386, April.
    • Handle: RePEc:bla:stratm:v:22:y:2001:i:4:p:379-386
    DOI: 10.1002/smj.165
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    Cited by:

    1. Tobias Kretschmer & Phanish Puranam, 2008. "Integration Through Incentives Within Differentiated Organizations," Organization Science, INFORMS, vol. 19(6), pages 860-875, December.
    2. Susan Helper & Morris M. Kleiner & Yingchun Wang, 2010. "Analyzing Compensation Methods in Manufacturing: Piece Rates, Time Rates, or Gain-Sharing?," NBER Working Papers 16540, National Bureau of Economic Research, Inc.
    3. Carsten Linz & Günter Müller-Stewens, 2012. "Lösungsanbieterstrategien," Schmalenbach Journal of Business Research, Springer, vol. 64(65), pages 1-24, January.
    4. İpek, İlayda & Bıçakcıoğlu-Peynirci, Nilay, 2020. "Export market orientation: An integrative review and directions for future research," International Business Review, Elsevier, vol. 29(4).
    5. Burgers, J. Henri & Jansen, Justin J.P. & Van den Bosch, Frans A.J. & Volberda, Henk W., 2009. "Structural differentiation and corporate venturing: The moderating role of formal and informal integration mechanisms," Journal of Business Venturing, Elsevier, vol. 24(3), pages 206-220, May.
    6. Wei, Yinghong (Susan) & Atuahene-Gima, Kwaku, 2009. "The moderating role of reward systems in the relationship between market orientation and new product performance in China," International Journal of Research in Marketing, Elsevier, vol. 26(2), pages 89-96.

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